Bruce operates a sheep and cattle farming enterprise in the Cabonne Region. Over his many years as a farmer, Bruce has experienced his share of ups and downs but when his farm was severely affected by flooding in 2022, he needed extra support to start the recovery. He was referred to RFCS NSW for assistance with preparing and applying for a flood grant. Having no modern technology at his farm such as a computer, internet or mobile phone, he needed help from RFCS NSW to navigate his lack of digital skills and get the financial assistance that he needed.
During his sessions with his local Rural Financial Counsellor, Danielle, they identified that he was experiencing cashflow problems after his wife passed away and the farm was hit by the floods. Together they set clear goals including applying for the Rural Assistance Authority’s flood grant which were to fix the damaged fencing and improve the infrastructure of the farm.
Bruce and Danielle also worked together on other aspects of his farm business such as doing a business review and a plan for applying for Farm Household Allowance, as well as an application for the electronic identification of his sheep. They also discussed succession planning and workshopped options of what would happen to the farm when Bruce is no longer able to manage on his own.
With the support of RFCS NSW, Bruce successfully received the flood grant. The funding enabled him to repair the farm’s infrastructure and enabled him to free up income and cashflow to pay for repairs which would have otherwise dramatically impacted his quality of life and the future success of the farm.
“I was very happy with the service. Danielle went above and beyond with 110% effort and because of her hard work we were able to secure the flood grant. I appreciate the help she gave me,” says Bruce.
Small Business Financial Counselling Program Proposal
RFCS NSW developed this report in response to the economic and financial conditions surrounding the small business sector in regional NSW. It draws on learnings derived from delivering and evaluating the pilot Regional Small Business Financial Counselling program that RFCS NSW ran from 2020-23, in addition to economic and sector data, literature and policy reviews and drivers at the state and federal level. Based on this evidence and analysis, a NSW RSBFCS has been developed.
It is recommended the NSW Government fund this service initially over four years with a view to a co-funding arrangement with industry beyond the initial period. Having this service would address a market failure and improve the resilience and viability of small businesses in regional NSW.
Please read more about our proposal via the link below.
Ready, Set… Review! Business reviews support better farm results
When clients come to RFCS NSW for support, one of the first actions our counsellors will step farmers through is a business review. This provides farmers with valuable insights into their business performance by comparing their financial data, both actuals and ratios, to current and previous years, as well as to industry standards and competitors.
Some of the key benefits include:
Understand your farm’s performance: Undertaking a business review provides information on how the business is performing against goals and KPI’s.
Make informed business decisions: Make decisions based on a comprehensive understanding of your business’s financial strengths and weaknesses.
Identifying opportunities: Helps farmers identify areas for improvement within their business. By identifying performance gaps, farmers can prioritise areas for further investment and innovation.
How to get started:
gather financial statements: Collate your farm business’s annual financial statements, including your profit and loss statements and balance sheet
internal benchmarking: Assess your business performance against its past performance to identify areas of improvement or decline. Focus on measuring your levels of debt, an effective level of debt is important for long term viability. This can be measured by equity, debt to income ratio, finance costs as a percentage of farm income, return on equity calculations. All this information can be obtained from the financial statements. Use a range of indicators to gain a comprehensive understanding of your farms business performance
talk to us: Your local Rural Financial Counsellor will guide you through the business review process.
“Our RFC gave us great assistance. The most valuable aspect of the support we received was helping us put together a business review. This helped us answer the questions that we needed help with,” Michelle, farmer in Murray River LGA.
Our Rural Financial Counsellors will help you consider your individual situation and circumstances. RFCS NSW offers support and tools to help farmers understand their business review and achieve sustainable success. Contact your local Rural Financial Counsellor at RFCS NSW on 1800 319 458.
Financial Counsellors Association of NSW Conference
On 11 and 12 September 2024 RFCS NSW attended the Financial Counsellors Association of NSW (FCAN) Conference in Sydney. This flagship annual event brings together most of the agencies providing financial counselling in NSW to obtain information and discuss sector issues, trends, policies and practice standards. It is also an important networking and professional development exercise. This year’s agenda included presentations from key agencies in the sector – the Australian Financial Security Authority (AFSA), Australian Financial Complaints Authority (AFCA), Australian Taxation Office (ATO), Financial Rights Legal Centre (FRLC), Financial Counselling Australia (FCA), Moneycare, Seniors Rights Service and the banks and various individual speakers on topics pertinent to our clients and service delivery model. Some of the key points raised from the conference were:
Statistics and trends
At the peak of the Global Financial Crisis (GFC) there were 37k insolvencies per annum. The current annual rate is 12k less.
Most bankruptcies are renters with less than $50k debt.
The key driver of financial hardship is employment status.
There has been significant growth in and loss from scams. In 2023-24 AFCA received 59k complaints – an increase of 11 per cent from 2022-23. Of the 59k, 10k related to scams. This is an 81 per cent increase from 2022-23. The ACCC report Australians are lost $2.7 billion to scams last year. Most scams come from organised crime syndicates.
AFCA also reported an increase in complaints regarding buy now pay later and pay in four providers. They are advocating for reform and regulation in this part of the financial market and have reported systemic issues to APRA and ASIC where they have evidence of consumer harm from lack of formal regulations in this space.
Policy and strategy
The ATO is increasing its effort in debt recovery. Currently there is some $50 billion in outstanding debt of which 70 per cent relate to small business. Consequently, the ATO is the biggest referrer to the Small Business Debt Helpline.
The Attorney General is undertaking extensive reform of Australia’s bankruptcy laws. Key changes proposed are increasing the threshold for involuntary bankruptcies from $10,000 to $20,000, with the threshold to be indexed each year, increasing the timeframe for response to a Bankruptcy Notice from 21 days to 28 days, debt agreements no longer to be considered ‘an act of bankruptcy’ and reducing the period for which a discharged bankruptcy is recorded on the National Personal Insolvency Index to seven years. In addition to these proposed changes, the Attorney-General’s Department has begun consulting on introducing a Minimal Asset Procedure in Australia.
AFCA’s monetary limits are $1.2 million per claim and $631,500 for compensation. The ePayments Code determines liability for unauthorised scams. Most providers are signed up to the code.
AFSA has developed a new Education and Outreach team to provide education to key stakeholders, co-developing policies and products and protect against system misuse as part of the strategic direction to better protect and assist vulnerable consumers. AFSA will also focus on investigating poor creditor conduct with a particular lens on reviewing creditors that are under performing for clients and/or providing untrusty worthy advice.
The banks are deploying significant resources – biometrics, encryption, multi factor authentication and AI to protect clients and themselves from scams.
The House of Representatives Standing Committee on Economics inquiry into insurers’ responses to 2022 major floods claims is scheduled to table its report in parliament by 18 October 2024. The high cost of insurance and payouts by insurers are expected to be the key issues responded to.
Expressions of interest for delivery of the Commonwealth Financial Counselling program from 1 July 2025 for five years are expected to be announced in the coming weeks/months.
Service delivery
A FCAN members wellbeing report is about to be released. The results are not satisfactory particularly in the human resource management area.
A Bankruptcy Toolkit was launched in May for counsellors and other stakeholders.
As required by the Banking Core of Practice banks have a customer advocate office to support clients in hardship. Key actions these offices undertake include working with financial counsellors on moratoriums, partial payment arrangements, loan restructuring, debt waivers and settle for less arrangements.
The National Debt Helpline (FCA) have a new ICT system for booking counsellors. Ave completed a trial in the Northern Territory where referrals were booked directly to available Financial Counsellors. It will be rolled out in South Australia this year and Eastern States early next year.
Case notes are an essential part of financial counselling. They are required for evidence, handover, insurance and recollection. Records should be focused on client contact and information pertinent to service provision.
FCA presented their work building guidelines with ASIC for Financial Counsellors to help understand their responsibilities for ethical practices regarding advice. Guides will be released via FCA in the coming weeks and detail the types of advice financial counsellors can give as well as how it should be captured in case notes.
The past year has been challenging with rising interest rates, increased input costs and the cost of living placing significant pressure on our clients. During tough times RFCS NSW remains dedicated to providing financial counselling and projects to primary producers, small businesses and individuals in regional NSW who are experiencing, or at risk of, financial hardship.
We proudly provide free, confidential and professional financial counselling across 60 Local Government Areas throughout the state. In 2023-24 RFCS NSW and our Illawarra-based FCS NSW assisted a combined total of 1,519 clients with various challenges including financial statement analysis and preparation, succession planning, credit and debt issues, budgeting, restructuring and mediation, farm exiting and general assistance to improve profitability and sustainability.
Please read our 2023-24 Annual Report to learn more about our work and achievements.
